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After months of escalating tensions, Iran has indicated a willingness to restart talks over its nuclear program with the five permanent members of the United Nations Security Council and Germany. The United States and the other countries should take Iran up on its offer with a firm proposal of their own.

Iran is motivated by pain from economic sanctions that have made it more difficult for Tehran to sell oil and have weakened its currency, thereby raising the cost of essential imports. Iran's leaders are also concerned that their country could be the target of military attacks from Israel, the U.S. or both.

It is in the American interest to pursue a negotiated outcome to the current impasse. The reason is straightforward. Sanctions and clandestine efforts will not succeed in stopping Iran's nuclear advance at an acceptable plateau or in undermining the regime—and the two principal alternatives to diplomacy promise to be costly and risky.

One alternative is to go to war with a classic preventive attack. This would likely delay the Iranian program, but perhaps not for more than a few years. Moreover, whatever is destroyed will likely be rebuilt in a manner that makes future attacks more difficult. An attack also could trigger retaliation and set in motion a chain of events that leads to widespread loss of life and a massive increase in oil prices.

The other alternative to negotiations is to live with an Iran that possesses one or more nuclear weapons, or that is perpetually on the verge of being able to. But a nuclear Iran would place the region on a hair trigger: The incentive of Iran or Israel to strike first in a crisis would be great, while other countries (including Egypt and Saudi Arabia) would be tempted to acquire nuclear weapons of their own. An Iran backed with nuclear weapons might be even more aggressive in pursuit of its aims to become a regional hegemon. And no one could rule out the possibility that nuclear material might end up in the hands of terrorist groups backed by Tehran.

This makes negotiations worth exploring, even though they are unlikely to resolve the problem for all time. Iran will not do away with its nuclear program, which is simply too extensive and enjoys too much political support among Iranians. No Iranian government could forfeit the "right to enrich" and survive.

Negotiations need to achieve meaningful results if they are to be embraced. The guiding principle is that Tehran must allow intrusive inspections and limits on its nuclear activities so that it cannot complete a dash for the bomb without providing the world with enough advance warning to react. This means enabling international inspectors to visit suspected nuclear facilities, not simply those declared by Iran. Stepped-up inspections should focus on providing continuous surveillance, whether electronically or by full-time inspectors, of enriched uranium stocks and output from Iran's nuclear facilities.

Placing physical limits on the Iranian program would involve steps to convert Iran's growing stocks of enriched uranium into fuel for its reactors, which is the regime's stated purpose. This would lengthen the time it would take to convert any nuclear material into bomb material. Tehran should be required to reconfigure its enrichment facilities so that they only produce reactor fuel, rather than medium or highly enriched uranium. Iran has produced five years worth of medium-enriched uranium for its medical reactor—so anything more only makes sense as part of a military program. Limits to the scale of Iranian facilities, and on the deployment of new technologies, are also essential.

In exchange for such concessions, the world should offer to dial back the most recent sanctions (including those not yet fully implemented) that target the Iranian oil and financial sectors. But no existing sanctions should be eased (or new sanctions delayed) as a reward for Iran's agreeing to talk, lest negotiations prove to be nothing more than a tactic. And sanctions aimed at firms and individuals involved in illicit nuclear activities—particularly those associated with military efforts—would need to stay. So, too, would other sanctions prompted by Iranian violations of human rights, support for terrorism, and threats to regional security beyond its nuclear program.

Iran might well reject this deal. Many Iranians see their nuclear program as a symbol of national greatness and a guarantee against invasion and attempts to oust the regime. Moreover, even if some Iranian leaders are inclined toward making a deal, others may remain opposed. Just two years ago, a split between Iranian President Mahmoud Ahmedinejad and Supreme Leader Ali Khamenei scuttled a modest agreement that would have slowed Iran's nuclear program.

One way to increase the odds that a deal would be accepted is to make the outlines of any compromise public. The Iranian people would then be able to see that the world was not trying to humiliate Iran but rather offering it something fair, if only Iran's leaders would agree. Political pressure could grow on those leaders to accept the compromise, gain relief from sanctions and avoid military attack.

But even if public pressure fails to induce Iran's leaders to compromise, negotiations still make sense. Before the decision is made to embrace alternatives that promise to be costly, it is important to demonstrate—to domestic and world opinion alike—that a reasonable policy was explored. The political, economic, military and human responsibility for any conflict should be with Iran if that is where we end up.

Mr. Haass is president of the Council on Foreign Relations, where Mr. Levi is a senior fellow.

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